It should be said first that the vast majority of landlords are honourable and law abiding and provide a good service. However there is no doubt that the scammers are out there and it is easy for the inexperienced tenant (for example students) to get duped by them.
As always avoidance is better than cure, so here are some guidelines to help you:
Always do a bit of background checking on your landlord
For example ask around. Are they a member of their local landlords association or accreditation scheme? Can you speak to any of their former tenants? Also, find out what a search against their name on the internet shows.
If you are a student and you found them via your accommodation office service, you should be safe, otherwise, be wary as scammers often target students.
If you do not know much about them, get a credit check done (or even if you do know a bit about them). One service offering this is Rentchecks which has a specific service for tenants, or you can do a standard credit check from one of the credit reference companies. There are quite a few online, or ask your insurers if they can recommend someone.
You can also find out who actually owns the property by doing a check at the Land Registry.
Never agree to wire funds to a money transfer service
This is a classic rip off. You are asked to wire money to a friend or relative ‘as a sign of good faith’. The ‘landlord’ will then ask for a receipt, withdraw the money and disappear. This scam is particularly associated with the transfer service Western Union.
Know your rights
The Observer article mentions costs being taken for undisclosed expenses. It is highly likely that if these costs are just being ‘deducted’ from money paid for rent, the deductions are invalid and the payment will stand as rent.
For example, if they have not been agreed in advance, then in most cases they cannot be charged. Landlords cannot just impose charges arbitrarily after the tenancy agreement has been signed.
So far as clauses in the tenancy agreement are concerned, these may be unfair and therefore invalid and unenforceable under the Unfair Terms in Consumer Contracts Regulations. In which case you can refuse to pay them.
There is also mention of landlords asking for guarantees instead of a deposit and then unreasonable expenses being charged to the guarantors. However the guarantor will only be liable for legitimate claims. If the costs are extortionate then the guarantor can dispute them and challenge them, at court if need be (although the landlord may not want to risk going to court if the charges really are extortionate).
The guarantor will need the help of the tenant for this though, which is another reason why you should never sign a guarantee for anyone you do not know really well.
If you do get caught out
Tell Shelter. They are compiling evidence and will be pleased to hear from you. You will find a form here.
Complain about the landlord to your local trading standards office, or local authority Housing Officer or TRO. Even if they cannot help you, they may be able to take action against the landlord to prevent this happening to others. At the very least it is helpful for them to know who the rogue landlords are in their area.
If you vacate the property and find that your deposit has not been protected, visit our Tenancy Deposit Claims site to see how a claim can be made against your landlord.
Note that if you found the scammer landlord via an agency, the agent may be liable for breach of warranty of authority. Have a word with a solicitor about this if you think it applies. Some may be prepared to act on a no win no fee basis.
Have you suffered from landlord scams? Do you have any advice for readers?
See more help for tenants on Landlord Law.